Himmelmann v. Schmidt

Crocker, J. delivered the opinion of the Court—Cope, C. J. concurring.

This is an action to foreclose a mortgage. The defense is that the mortgaged premises were and are the homestead of the mortgagor. To this it is replied, that the homestead claim was duly-abandoned, according to the provisions of the statute, before the mortgage was executed. The Court found for the defendant upon the homestead question, and rendered judgment accordingly for the debt alone, without any order for the sale of the mortgaged premises, from which the plaintiff appeals.

From the findings of the Court, it appears that the defendant for several years, while his wife was living, occupied the premises as a homestead; that she died in April, 1856, and he has ever since continued to reside thereon with his four children; that on the twentieth day of October, 1856, he executed a mortgage on the premises for $1,000; and April 25th, 1859, this mortgage was released and a new one given for $1,500, which included the old debt and the sum of $500 theun^igyaeed; and on the twenty-fourth day of November, jxjoltgage was released, and the one now sued on §ívei^tfe;’$2,350, whilh included the debt secured by the second m<n|tgage^ an<| - ^ ■ farther advance of $850; that the defendant dhly-máde", acknowledged, and recorded his homestead declaration tin the of May, 1860; that he made his declaration o^ abandonmeaiFof the homestead, which bears date November 26®^was not acknowledged and recorded until December 1st, 1860, at ten o’clock, a.m. ; the mortgage bears date November 24th, but was not acknowledged and recorded until two minutes past ten o’clock, a.m. of December 1st, 1860. Under these facts, the Court below found as conclusion of law that the mortgage was not a valid incumbrance on the premises.

The Act of 1860, which was in force at the time this mortgage was executed, provides, that 61 No mortgage or alienation of any kind made for the purpose of securing a loan or indebtedness upon the homestead property shall be valid for any purpose whatsoever and it is contended that the present mortgage comes within the [120]terms of this provision, and is therefore utterly null and void, and cannot be used for any purpose whatsoever. Such a clause, so restrictive upon the right of a citizen to make a contract, must be strictly construed, and can be applied only to those cases which come clearly within its letter and spirit. Only a part of the present mortgage was given to secure a “ loan ”—that is, the $850 advanced when it was made. The balance of the mortgage, $1,500, was given for the release of a prior valid mortgage upon the property, and as a substitute therefor, and does not therefore come within the letter or spirit of the clause. A Court of Equity, under such circumstances, even if it came within the provisions of the act, would treat it, to the extent of the old mortgage included in it, as a substitute for the former mortgage, and to that extent as a valid incumbrance upon the property. (Dillon v. Byrne, 5 Cal. 455.)